enterprise risk management (ERM)

  

Definition

Defined by the US 'Committee Of Sponsoring Organizations Of Treadway Commission' (COSO) as, "a process, effected by an entity's board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risks to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives." COSO divides ERM process into eight components: (1) internal environment, (2) objective setting, (3) event identification, (4) risk assessment, (5) risk response, (6) control activities, (7) information and communication, and (8) monitoring.

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